FINANCIAL STATEMENT BULLETIN Klaus Andersen, CEO Martti Nurminen, - PowerPoint PPT Presentation

FINANCIAL STATEMENT BULLETIN Klaus Andersen, CEO Martti Nurminen, CFO Q4/2019 February 4, 2020 Financial Statement Bulletin

IMPORTANT NOTICE The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of Basware. In some cases, such forward-looking statements can be identified by terminology such as “expect”, “plan”, “anticipate”, “intend”, “believe”, “estimate”, “predict”, “potential”, or “continue”, or the negative of th ose terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. All forward-looking statements included herein are based on information presently available to Basware and, accordingly, Basware assumes no obligation to update any forward- looking statements, unless obligated to do so pursuant to an applicable law or regulation. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any investment activity. 2

KEY TAKEAWAYS Strong performance in profitability Order intake EUR 6.9 million for the quarter Revenues in line with full year guidance 3

CONTINUED INDUSTRY LEADERSHIP Basware named an industry leader by Forrester Basware featured in SAP App Center SirionLabs application partnership signed 4

Basware is a Leader in The Forrester Wave™ report: eProcurement Platforms, Q4 2019 Basware scores highly in 10 criteria, including: 5/5 in Product strategy 5/5 in Globalization 4.2/5 in Invoice processing “Basware is a leading choice for CPOs and CFOs who hope to achieve 90% or more process automation across their P2P spend, including simple and complex categories. It excels at automating capture and processing of many different types of invoices, including milestone, time, and periodic billing.“

CUSTOMER SUCCESS EXAMPLES OF CUSTOMER WINS SIGNED IN 2019 + 15% average deal size 2018 to 2019 + 38% growth in new customer acquisition 2018 to 2019 6

BUSINESS DEVELOPMENT IN H2/19 Gross margin, % Adjusted EBITDA +9.2 M€ +5 percentage points improvement from H1/19 → H2/19 H1/19 to H2/19 Consulting revenue Order intake +2 M€ +8% H1/19 → H2/19 H1/19 → H2/19

STRONG CLOUD METRICS Gross renewal rate Net renewal rate 95% 104% 70% Cloud Gross margin LTV / CAC Ratio 7x 65% Cloud Non-Cloud At end of 2019

FINANCIAL REVIEW

2019 FINANCIAL HIGHLIGHTS Total growth* Cloud growth* Adjusted EBITDA EUR 5.2 +6% +13% 2019 million Total growth* Cloud growth* Adjusted EBITDA Q4/19 +7% +14% EUR 2.5 million *Organic constant currency basis. 10

CLOUD ORDER INTAKE • All time high 25.0 12.0 quarterly order intake 10.0 20.0 • Average new customer deal size 8.0 EUR million continued to develop 15.0 positively 6.0 • Growth on organic 10.0 constant currency 4.0 basis 15% in Q4/19 and 9% in 2019 5.0 2.0 5.9 6.9 21.5 23.7 0.0 0.0 Q4/2018 Q4/2019 FY 2018 FY 2019 Annual recurring revenue gross order intake is calculated by summing the total order intake in the period expressed as an annual contract value. 11

NET SALES PROGRESSION • Overall, net sales performance in line with expectations • Cloud revenue growth accelerating compared with Q3 '19 • Continued Consulting revenue growth Net sales by revenue Q4/2019 Q4/2018 Change, Change, 2019 2018 Change, Change, type, EUR thousand % %* % %* Cloud 27,390 23,916 14.5 13.9 101,442 89,482 13.4 12.9 Consulting 6,978 6,063 15.1 15.1 24,962 23,567 5.9 7.7 Maintenance, license and 4,897 6,508 -24.8 -24.4 21,889 28,368 -22.8 -18.5 other Total 39,264 36,488 7.6 7.3 148,302 141,417 4.9 5.9 12 *On an organic basis at constant currencies

PROFITABILITY EUR thousand Q4/2019 Q4/2018 Change, 2019 2018 Change, % % • The execution Net sales 39,264 36,488 7.6 148,302 141,417 4.9 of the Cost of sales -18,294 -17,026 7.5 -71,493 -69,620 2.7 productivity programme Gross profit 20,970 19,462 7.8 76,810 71,797 7.0 has reduced S&M -11,798 -11,969 -1.4 -45,190 -43,041 5.0 total costs R&D -6,597 -6,848 -3.7 26,815 -27,222 -1.5 and improved G&A -3,716 -4,061 -8.5 -14,572 -16,247 -10.3 profitability Total operating expenses -22,111 -22,878 -3.4 -86,577 -86,510 0.1 Other operating • EBITDA lower -374 -433 -13.5 -4,770 13,242 income and expenses than Q3 Operating profit (EBIT) -1,516 -3,850 60.6 -14,537 -1,471 mainly due to Adjustments 85 431 -80.2 3,781 -13,581 cost Depreciation and -3,911 -2,593 50.8 -15,941 -10,688 49.2 seasonality amortization Adjusted EBITDA 2,480 -826 5,185 -4,364 13

FREE CASH FLOW METRIC Q4/2019 Q4/2018 2019 2018 • Profitability EUR thousand improved but did EBITDA 2,395 -1,257 1,403 9,217 not fully offset the Capitalizations -2,588 -2,277 -10,617 -10,933 increase in finance Finance expenses expenses -2,722 -567 -9,091 -2,080 Taxes, excl. deferred taxes -825 -302 -1,341 -961 • Basware expects Payment of lease liabilities 1 -1,246 0 -4,372 - to reach positive Share based compensation, 212 327 188 1,229 free cash flow on a share part run-rate basis by Gain/loss on sale of assets 0 0 0 -16,300 the end of 2020 Free cash flow metric -4,774 -4,076 -23,829 -19,829 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2019 Q2/2019 Q3/2019 Q4/2019 -1 445 -3,129 -4,076 -4,774 -4,836 -7,787 -7,816 -9,794 14 1 Payment of lease liabilities in 2018 are included in EBITDA.

CASH FLOW AND BALANCE SHEET • The improvement in EUR thousand Q4/ Q4/ 2019 2018 cash flows was due 2019 2018 to higher Cash flows from operating activities 4,724 -2,840 4,159 -6,261 profitability, and improvement in Net change in cash and cash equivalents 1,016 -5,323 -9,170 20,135 working capital Cash and cash equivalents 31,672 40,747 31,672 40,747 Gross financial debt 60,885 57,206 60,885 57,206 Net financial debt 29,213 16,459 29,213 16,459 Gross debt including leases* 77,689 57,206 77,689 57,206 Net debt including leases* 46,017 16,459 46,017 16,459 15 *Comparison impacted by IFRS16 methodology change

OUTLOOK

OUTLOOK FOR 2020 FOR 2020 BASWARE EXPECTS THE FOLLOWING Net sales to grow at Positive EBIT around the same rate as in 2019* * On an organic basis at constant currencies

KEY TAKEAWAYS Strong performance in profitability Order intake EUR 6.9 million for the quarter Revenues in line with full year guidance 18